01 - The Strategic Role Of

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THE STRATEGIC ROLE OF

HUMAN RESOURCES

MANAGEMENT

EXCEL

BOOKS

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1

Chapter


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ANNOTATED OUTLINE1-2

The Strategic Role Of Human Resources Management

Introduction

Organisations have to provide a healthy work climate in order to get

the best out of people. To utilise the capabilities of people fully, you

need competent leadership willing to recognise, reward and nurture

talent at all levels. This is where human resource managers play acritical role by bridging gaps between employee expectations and

organisational requirements by adopting appropriate human resource

strategies and practices. HRM, in short, is the art of procuring,

developing and maintaining competent workforce to achieve the

goals of an organisation in an effective and efficient manner.


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Human Resource Management:

Features

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Pervasive force

Action oriented

Individually oriented

People oriented

Future oriented

Development oriented

Integrating mechanism

Comprehensive function

Auxiliary service

Inter-disciplinary function

Continuous function


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Important terms1-4


Human resource: Knowledge, skill sets, expertise of employees, the

adaptability, commitment and loyalty of employees.

Skills: The individual abilities of human beings to perform a piece of work.

Resource: The stock of assets and skills that belong to a firm at a point of time.

Capability: The ability of a bundle of resources to perform an activity; a way of

combining assets, people and processes to transform inputs into outputs.

Core competencies: Activities that the firm performs especially well when

compared to its competitors and through which the firm adds value to its goods

and services over a long period of time.

Competitive advantage: It comes from a firm's ability to perform activities more

distinctively and more effectively than rivals. To attain competitive advantage, firmsneed to add value to customers and offer a product or service that cannot be

easily imitated or copied by rivals (Uniqueness).

Value: Sum total of benefits received and costs paid by the customer in a given

situation.

Clearing the Fog


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Scope ofHRM

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Personnel aspect

Welfare aspect

Industrial relations aspect

HRM mainly covers three broad areas


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Objectives ofHRM

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HRM aims at achieving organisational goals, meet the expectationsof employees; develop the knowledge, skills and abilities of

employees; improve the quality of working life and manage human

resources in an ethical and socially responsible manner.

Importance ofHRM

From an organisational standpoint, good HR practices help in

attracting and retaining talent, train people for challenging roles,

develop their skills and competencies, increase productivity and

profits and enhance standard of living


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Importance ofHRM

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attractand retain talent

train people for challenging roles

develop skills and competencies

promote team spirit

develop loyalty and commitment

increase productivity and profits

improve job satisfaction

enhance standard of living

generate employment opportunities

Good HR Practices help


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HRM as a central subsystem in anorganisation

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ProductSubsystem

HR Subsystem

Procurement

Training

Compensation

Appraisal

Rewards

MarketingSubsystem

Finance

Subsystem

Technical

Subsystem


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Functions ofHRM

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Planning

Organising

Directing

Controlling

Operative Functions

P/HRM

Managerial

functions:Procurement

Job Analysis

HR planning

Recruitment

Selection

Placement

Induction

Internalmobility

Development:

Training

Executivedevelopment

Careerplanning

Succession

planning

Humanresources

developmentstrategies

Motivation and

Compensation:

Job design

Work scheduling

Motivation

Job evaluation

Performance andpotential

appraisal

Compensation

administration

Incentives

benefits andservices

Maintenance:

Health

Safety

Welfare

Social security

Integration:

GrievancesDiscipline

Teams andteamwork

Collectivebargaining

Participation

Empowerment

Trade unions

Employersassociations

Industrialrelations

Emerging

Issues:

Personnelrecords

Personnelaudit

Personnelresearch

HRaccounting

HRIS

Job stress

Mentoring

InternationalHRM


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Strategic Human ResourceManagement

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Competitive advantage through people?

Competitive advantage allows a firm to gain an edge over its rivals

when competing. It comes from a firms unique ability to perform

activities more distinctively and more effectively than rivals. HR can be

a source of competitive advantage when the talents of people working

in the firm are valuable, rare; difficult to imitate and well organised to

deliver efficient and effective results.


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The evolving strategic role ofHuman Resource Management

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Strategic focus

Operational focus

PeopleSystem

Strategic partner Change agent

Administrative expert Employee champion


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Realising the growing importance of HR, a new line of thinking

emerged elevating the status of HR to that of a strategic partner both

in the formulation of a firms strategic as well as in the implementation

of business activities. SHRM, simply stated, is the linkage of HRM

with strategic goals and objectives with a view to improve business

performance and develop organisational cultures that foster

innovation and flexibility. Strategic HR differs radically from traditional

HR in a number of ways:

Strategic Human ResourceManagement


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TraditionalHR vs. Strategic HR

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Point of distinction

Focus

Role of HR

Initiatives

Time horizon

Control

Job design

Key investments

Accountability

Responsibility for HR

Traditional HR

Employee Relations

Transactional change

follower and respondent

Slow, reactive, fragmented

Short-term

Bureaucratic-roles, policies,

procedures

Tight division of labour;

independence,

specialisationCapital, products

Cost centre

Staff specialists

Strategic HR

Partnerships with internal and

external customers

Transformational change leader

and initiator

Fast, proactive and integrated

Short, medium and long (as

required)

Organic-flexible, whatever is

necessary to succeed

Broad, flexible, cross-training

teams

People, knowledge

Investment centre

Line managers


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EVOLUTION OF HRM

The field of HRM evolved both in India and elsewhere over anumber of years to present level of sophistication and use ofproactive methods

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The industrial revolution

Scientific management

Trade unionism

Human relations movement

Human resources approach


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Evolution of the Personnel Function

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Concept What is it all about?

The Commodity

concept

Labour was regarded as a commodity to be bought and sold.

Wages were based on demand and supply. Government did

very little to protect workers.

The Factor of

Production concept

Labour is like any other factor of production, viz, money,

materials, land, etc. Workers are like machine tools.

The Goodwill concept Welfare measures like safety, first aid, lunch room, rest room will

have a positive impact on workers productivity

The Paternalistic

concept/ Paternalism

Management must assume a fatherly and protective attitude

towards employees. Paternalism does not mean merely

providing benefits but it means satisfying various needs of the

employees as parents meet the requirements of the children.

Cont


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The Humanitarian

concept

To improve productivity, physical, social and psychological

needs of workers must be met. As Mayo and others stated,

money is less a factor in determining output, than group

standards, group incentives and security. The organisation is a

social system that has both economic and social dimensions.

The Human Resource

concept

Employees are the most valuable assets of an organisation.

There should be a conscious effort to realise organisational goals

by satisfying needs and aspirations of employees.

The Emerging concept Employees should be accepted as partners in the progress of a

company. They should have a feeling that the organisation is

their own. To this end, managers must offer better quality of

working life and offer opportunities to people to exploit their

potential fully. The focus should be on Human Resource

Development.

Evolution of the Personnel Function


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Growth in India

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Legal phase

Welfare phase

Development phase


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Personnel Function in India;Changing Scenario

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Period Emphasis Status Roles

1920 30 Welfare management Clerical Welfare

Paternalistic practices administrator

1990s Incremental productivity Proactive, Developer

onwards gains through human growth-oriented Counsellor

assets Coach

Mentor

Problem solver

1940 60 Expanding the role to cover Administrative Appraiser

Labour, Welfare, Industrial Advisor

Relations and Personnel Mediator

Administration Legal adviso

Fire fighting

1970 80 Efficiency, effectiveness Developmental Change agent

dimensions added Integrator

Emphasis on human Trainer

values, aspirations, Educator


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Shifts in HR management in India

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Emerging HR practice

Strategic role

Proactive

Key part of organisational

mission

Service focus

Process-based organisation

Cross-functional eams,

teamwork most important

People as key

investments/assets

Traditional HR practice

Administrative role

Reactive

Separate, isolated fromcompany mission

Production focus

Functional organisation

Individuals encouraged,

singled out for praise,

rewards

People as expenses


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HRM in the new millennium

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Current thinking in HRM strongly supports the view that when

opportunities for growth and enhancement of skills are available in an

organisation, people will be stimulated to give their best, leading to

greater job satisfaction and organisational effectiveness. To this end,

therefore, HR managers in the new millennium are expected to

successfully evolve an appropriate corporate culture, take a strategic

approach to the acquisition, motivation and development of human

resources and introduce programmes that reflect and support the core

values of the organisation and its people.

Size of work force

Demands for better pay, benefits, working conditions

Cont


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Composition of workforce

Equal pay for equal work

Breaking down of glass ceiling

Constitutional protection to minority groups

Importance to factors such as age, sex, religion, region, caste especially while

dealing with multifarious, heterogeneous, culturally diverse work groups

Employee expectations

Better educated, more knowledgeable, emotionally strong and demanding

workforce

Demand for educated, trained, experienced and knowledgeable workers growing

Understand individual differences and develop appropriate policies to meet their

growing expectations.

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Changes in technology

Modernisation, computerisation, sophistication increasing by the day

Knowledge and skills need to be refined constantly

Training, retraining and mid-career counselling important

Equip employees so as to cope with dramatic challenges brought forward by rapid

advances in science and technology

Life style changes

Environmental challenges

Personnel function in future

Job redesign

Career opportunities

Productivity

Recruitment and selection

Training and development

Rewards

Safety and welfare

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Cont



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Changes in 21st century affecting HRM

HR as a springboard for success

Talent hunting, developing and retraining

Lean and mean organisations

Labour relationsHealth and benefit programmes


Documents

01 - The Strategic Role Of